Financial Transactions and Regulatory Compliance Review

The Social Side of IR

Investor relations professionals have been slow to adopt social media into their arsenal of communications tools, but with an actively tweeting president in the White House, the medium has never been watched more closely by investors.

President Trump’s unprecedented communication style and use of Twitter to praise and criticize individual companies have impacted markets while adding an additional consideration to the communications strategy of any public company. IR teams have historically seen Twitter as a medium that is generally not used by their investors, with little overall value to their communication efforts. However, with the ferocious rise of the tweet at the hands of President Trump, that may well be about to change.

In order to understand the evolving role of IR professionals, as well as how companies need to assess their communications strategies in today’s fast-paced world, Toppan Vintage commissioned Mergermarket to interview three leading experts.

Toppan Vintage question: How effective is the use of social media as an IR tool compared to other IR communication platforms? 3 leading experts weigh in...Gary LaBranche: Our research indicates that very few IR professionals use social media as their primary channel to communicate material non-public information to investors. In a 2016 NIRI member survey, less than 2% said they use social media for that purpose, although a larger percentage uses social media to complement other distribution channels. According to NIRI data, the most popular dissemination method for earnings information continues to be a press release sent via a paid press release distribution service (80%), followed by the company website (73%), and conference calls or webcasts (65%).

Richard S. Levick, Esq.: Generally, I think activist investors are increasingly much more sophisticated at campaigns than most companies by using both traditional and social media channels. There’s just not a lot of information out there publicly on what Mergermarket G. LaBranche R. Levick the playbook for activist investors is but they’re very good at changing the narrative, using political contributions, using the media, telling a different story and using social media to support it.

Some 22 states allow virtual meetings now – and what does that mean when we’re seeing activist shareholder activity rising by 36% between 2015 and 2016? I think tracking it closely and understanding the early warning signs is hugely important. I think it’s all going to become more and more challenging.

Devin Sullivan: The effectiveness of any communications tool depends on whether the audience finds it helpful or useful. If your shareholders rely on social media, then integrating this platform into your more traditional communications methods makes a lot of sense. It may not always provide the proper context, so its use as an adjunct means of communications – not a primary one – may be advisable, especially at the outset.

Download the full WHITEPAPER

Corporate disclosure, IR, and social media in the age of Trump

The role of corporate disclosure and investor relations professionals has beenissued new challenges as President Trump's administration brings expectedregulation changes and new threats by social media.

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